Brit Expats Scammed By Property Developer Granted Full Compensation By Spanish Court

British expats living in Zurgena, Almeria have been granted compensation for new-build homes which were never finished.

The case against developers New Medina Villas was brought by 14 mostly British expatriates after work on their new-build homes was stopped and the development seized due to its being on illegal land. A total of 111 unfinished homes dating back to 2005 were involved, most of which had been sold to foreign buyers as investments or retirement homes. The long-awaited judgement gave the developers six months to fully demolish the properties and forces New Medina Villas to reimburse the purchasers a total of 650,662 euros within 10 days of the court judgement as well as providing proof the monies have been returned.

Individual amounts due to the victims range between 73,830 and 151,030 euros, with the judgement forcing the developers to cease trading as well as banning them from working in real estate development or any industry related to the sector. The judge gave the company six months to demolish all the partially-finished properties, hopefully finally bringing to an end the scandal of expat property scams which severely damaged Spain’s popularity as an expat retiree destination over the past decade

. Purchasing property off-plan in Spain has always been risky, whether it involves homes built on illegal land, deposits lost when developers failed to build or, worst of all, having a finished home demolished due to the developers not having a permit to build. Some developers even sold off-plan homes twice, with estate agents also raking in fraudulently obtained payments from unsuspecting British expat retirees. The scandal all but destroyed Spain’s real estate market due to its bad publicity until a government crackdown resulted in a tightening of regulations and the rescinding of a considerable number of demolition orders.

Even so, those planning to purchase an off-plan property in Spain should still take care to ensure stage payments are covered by a bank guarantee as well as having official planning permission before construction begins. Checking the future build is fully documented with the Land Registry will also protect buyers’ investments.